What is the free-look period, and how do I return a policy I didn't want?

New life policies, and new individual health policies of a year or more, come with a free-look period of 30 days from the day you receive the policy document. If you disagree with the terms and have made no claim, you can return the policy, stating your reasons, and get the premium back less only a proportionate risk premium, any medical examination costs and stamp duty. The insurer must process the refund within 7 days of your request.

The free-look right comes from IRDAI's 2024 policyholder-protection regulations. It applies to every life policy and every new individual health policy, except policies with a term of less than a year, and runs for 30 days from receipt of the policy document, whether it reached you electronically or on paper. The insurer must tell you clearly that the free-look period is available.^[1]

Who can use it

• Covered: New life insurance policies, and new individual health policies with a term of one year or more.^[1]
• Renewals and ports: One insurer's health wording states expressly that free look does not apply to renewals or at the time of porting or migrating the policy.^[2]
• Only if you have not claimed: The option to return the policy is for a policyholder who has not made any claim.^[1]
• Motor and other general policies: The free-look regulation is written for life and health policies. A car policy, for example, is cancelled under its own cancellation condition instead.^{[1, 3]}

How to return the policy

1. 1

   Check the date you received the document

   The 30 days run from receipt of the policy document. Keep the email or courier record that shows when it arrived.^[1]

2. 2

   Write to the insurer

   Send a written cancellation request within the period, saying which terms you disagree with — the regulation asks you to state your reasons.^[1]

3. 3

   Expect the refund in your bank account

   Premium refunds are paid by electronic transfer to the bank account of the policyholder or proposer, and the insurer must process the request and refund within 7 days of receiving it.^[1]

4. 4

   Keep proof

   Keep a copy of your request and its acknowledgement in case the refund is late.

What you get back

Whatever your reason, you are entitled to the premium paid, subject only to a deduction for proportionate risk premium for the days you were covered, the insurer's expenses on your medical examination, if any, and stamp duty. For a unit-linked policy, the insurer must also buy back the units at the net asset value on the date of cancellation.^[1]

For health policies, IRDAI's master circular adds that if a refund is delayed, the insurer must pay it with interest at the bank rate plus 2 percent on the refundable amount.^[4]

If you have missed the free-look period

You can still cancel an indemnity health policy at any time by giving 7 days' written notice; for a policy of up to one year with no claim, the refund is the proportionate premium for the unexpired period. One insurer's standard car policy can be cancelled by the insured at any time, for any reason, under its own condition. Cancellation outside free look is a different right with a different refund, so read your policy's cancellation clause.^{[5, 3]}

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

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